Cape-based firm boosts business

Hyannis-based Sencorp bucks economic trends by expanding, acquiring a new business, and adding jobs on the Cape.

SARAH SHEMKUS

When it comes to current business trends, Hyannis-based machinery manufacturer Sencorp Inc. is something of a nonconformist.

Even as companies everywhere are scaling back or shutting down completely, Sencorp is expanding.

While other businesses are trimming their workforces to cut costs, Sencorp expects to bring 25 new jobs to the Hyannis area.

And while successful, independent Cape Cod businesses are regularly bought up by large, national corporations, this time it's the local company doing the buying.

Earlier this month, Sencorp announced that it will be merging with New Jersey-based manufacturer White Systems Inc. and moving that company's manufacturing operations to Hyannis.

The move, said Sencorp CEO Brian Urban, will increase his company's workforce by 36 percent, more than double its annual revenue and improve operations for both businesses.

"Both companies are going to enjoy a lot more efficiency from combining the businesses," said Urban, who will continue as CEO of Sencorp and take on chief executive duties for White Systems.

Sencorp, which currently employs 70 people, manufactures the machines used to make and seal the plastic blister packaging that is used on many consumer products.

Sencorp used to be owned by Ohio Firm DT Industries, but went independent in 2004 when it was bought by a group of employees, including Urban, and Management Capital LLC, a Providence, R.I.-based private equity firm.

White Systems designs and produces storage systems for use in retail, industrial and pharmaceutical settings.

Sencorp is housed in a 155,000 square foot facility and had been looking, for some time, for a business that could occupy some of that space.

The company also was faced with the challenge of how to grow its business.

Approximately 80 percent of the blister packaging used on American consumer goods comes off of Sencorp machines, Urban said.

"When you own that much market share, it's very difficult to grow," he said.

White Systems seemed like a good fit, he explained, because it has a well-respected brand name and has continued to sell well during the economic downturn.

The company, however, had not been well-managed and, therefore, needed the cash that a merger would provide, Urban explained.

There is also plenty of room to improve the efficiency of White Systems' manufacturing processes and turn out products more quickly, which will provide the company with a market advantage, he said.

The two businesses are currently moving White Systems into the Hyannis facility and expect to begin manufacturing that company's products here on Jan. 12.

These new operations will create 25 new manufacturing jobs, ranging from welding to engineering, for which the company is already hiring. The pay for these positions will start around $15 per hour for lower-level jobs to annual salaries of $60,000 to $70,000, Urban estimated.

White Systems' service network of 25 employees will remain in place nationwide, and a New Jersey-based technical center will continue to employ 12 people.

Local business insiders said that Sencorp's move is unusual for the Cape in a few ways.

Traditionally, the manufacturing industry is one of the smallest employers on Cape Cod.

Last month, approximately 3,000 people in the region worked in manufacturing, representing 3 percent of total jobs in the area.

Statewide, the number of manufacturing jobs has been falling steadily since the mid-1980s, according to a study released this spring by the Center for Urban and Regional Policy at Northeastern University.

Sencorp "has really sort of bucked that common sense thinking about what you would assume would work on the Cape," said Wendy Northcross, CEO of the Cape Cod Chamber of Commerce.

The company, which has operated on the Cape for more than 40 years, has proven that the service industry is not the only sector that can thrive here, she added.

Sencorp has also defied another Cape Cod trend by remaining both independent and local as they make this move to expand, said Deborah Converse, CEO of the Hyannis Area Chamber of Commerce.

"That's what's exciting about it," she said. "They're bringing in jobs—they're not being bought up by another company and maybe taking jobs away."

With the near-constant economic bad news, Converse and Northcross said, the positive news is very welcome.

"Talk about good news in the midst of the finalization of 2008," Converse said. "It's a good start to 2009."